**Plan B: Refinancing and Renting** - If you aren't getting the price you want, refinancing and renting the property could give you time for the market to recover.

However, if communication continues to be lacking, or if you receive inconsistent updates, it’s crucial to be prepared for the possibility that you may need to pursue legal recourse.Protect Yourself Moving Forward: If you do recover your investment or start new ventures, consider more stringent due diligence in the future.

For example, deductions on Schedule E might impact passive activity loss limitations or eligibility for certain credits.

While you can’t use real estate losses to offset your W-2 income, you can use losses from one rental property to offset the income from another.

Geez  I would be talking to your HML right now as I doubt they want to take it over.and try to get a workout with them ASAP.. sounds like its going to be  a loss anyway you cut it and I have to think you put up cash for a down payment as well. maybe someone else will have some pearls for you.Wholesaler is going to low ball you for sure.

Here is a link from an older post on the same subject with some options.https://www.biggerpockets.com/forums/52/topics/262681-rent-recovery-serviceIt would be good to get a collection on the persons credit report to help the next landlord even if there is no $$ recovered.

It's better to sell fewer home for retail than build homes at loss.

If you have positive cash flow, and  you use your own cash to pay off the property, you are adding to your cost.If you have negative cash flow, the negative comes out of your pocket and adds to your cost.If you try to change negative CF to positive by adding to the down payment, thinking the lower mortgage payment will change the negative to positive CF, you are only paying the negative CF upfront,...and still adding to your cost of the property.Profit starts AFTER you have recovered your cost (cash) in the form you paid for it (cash flow). 

Their losses appear limited to the moving expenses.

They ended up selling at a loss and learned a valuable lesson the hard way.If you wouldn't feel comfortable living in the area, then why invest there?